Correlation Between Sa Us and Sa Us

Can any of the company-specific risk be diversified away by investing in both Sa Us and Sa Us at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sa Us and Sa Us into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sa Small Company and Sa Mkt Fd, you can compare the effects of market volatilities on Sa Us and Sa Us and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sa Us with a short position of Sa Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sa Us and Sa Us.

Diversification Opportunities for Sa Us and Sa Us

0.94

Correlation Coefficient

Sa Us  Sa Us

Almost no diversification

The 3 months correlation between SAUMX and SAMKX is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Sa Small Company and Sa Mkt Fd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sa Mkt Fd and Sa Us is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sa Small Company are associated (or correlated) with Sa Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sa Mkt Fd has no effect on the direction of Sa Us i.e., Sa Us and Sa Us go up and down completely randomly.

Pair Corralation between Sa Us and Sa Us

Assuming the 90 days horizon Sa Small Company is expected to under-perform the Sa Us. In addition to that, Sa Us is 1.09 times more volatile than Sa Mkt Fd. It trades about -0.08 of its total potential returns per unit of risk. Sa Mkt Fd is currently generating about -0.05 per unit of volatility. If you would invest  3,619  in Sa Mkt Fd on December 28, 2024 and sell it today you would lose (123.00) from holding Sa Mkt Fd or give up 3.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Sa Small Company  vs.  Sa Mkt Fd

Sa Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sa Small Company has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Sa Us is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sa Mkt Fd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sa Mkt Fd has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking signals, Sa Us is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sa Us and Sa Us

The main advantage of trading using opposite Sa Us and Sa Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sa Us position performs unexpectedly, Sa Us can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sa Us will offset losses from the drop in Sa Us' long position.

The idea behind Sa Small Company and Sa Mkt Fd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.